STMicroelectronics N.V. (NYSE: STM), a leader in the semiconductor industry, released its U.S. GAAP financial results for the fourth quarter and full year ending December 31, 2024. In Q4, STMicroelectronics achieved net revenues of $3.32 billion, with a gross margin of 37.7% and an operating margin of 11.1%. The company reported a net income of $341 million, translating to $0.37 per diluted share.
Jean-Marc Chery, President & CEO, highlighted that fiscal year 2024 revenues declined by 23.2% to $13.27 billion, with the operating margin dropping to 12.6% from 26.7% in the previous year. Net income fell by 63% to $1.56 billion, while the company invested $2.53 billion in net capital expenditures, generating $288 million in free cash flow. In Q4, net revenues aligned with expectations, supported by growth in Personal Electronics, though Industrial revenues saw a decline.
The gross margin stood at 37.7%, in line with projections, but the book-to-bill ratio remained below 1 due to sluggish recoveries in the Industrial and Automotive sectors, especially in Europe. Looking ahead, STMicroelectronics projects Q1 2025 net revenues of $2.51 billion, reflecting a 27.6% year-over-year decline, with an expected gross margin of approximately 33.8%.Overall, net revenues of $3.32 billion for Q4 reflected a 22.4% year-over-year decline, while sequentially, revenues increased by 2.2%.
Gross profit for the quarter was $1.25 billion, a 35.7% decrease year-over-year, primarily affected by product mix and unused capacity charges. Operating income dropped by 64% to $369 million, leading to an operating margin of 11.1%, down from 23.9% in the previous year.
The Analog, Power & Discrete, MEMS, and Sensors segment experienced a 15.5% decline in revenue, accompanied by a substantial 41.2% reduction in operating profit. This downturn reflects market challenges and potential shifts in demand within the semiconductor industry, impacting the segment’s overall performance.
Similarly, the Microcontrollers, Digital ICs, and RF Products segment faced an even steeper decline, with revenues dropping sharply and operating profit plummeting by 66.4%. The significant decrease underscores the ongoing market volatility and weaker demand in key application areas, posing challenges for the segment’s profitability.
Net income for the quarter decreased to $341 million compared to $1.08 billion in the same period last year. Net cash from operating activities was $681 million in Q4, down from $1.48 billion a year ago. For the full year, net capital expenditures totaled $2.53 billion, and free cash flow was $288 million.
At the end of Q4, inventory stood at $2.79 billion, slightly lower than the previous quarter. STMicroelectronics paid $88 million in dividends and executed a $92 million share buy-back during the quarter. As of December 31, 2024, the company reported a net financial position of $3.23 billion, reflecting strong liquidity.
In the fourth quarter, STMicroelectronics introduced a strategic initiative focused on enhancing its manufacturing efficiency and cost optimization. The program aims to drive significant savings by 2027, reinforcing the company’s commitment to operational excellence and long-term financial sustainability. This initiative is expected to strengthen STMicroelectronics’ competitive position in the semiconductor industry by improving productivity and streamlining expenses.
Looking ahead to the first quarter of 2025, the company has projected net revenues of $2.51 billion, reflecting a 24.4% sequential decline. Additionally, the gross margin is anticipated to be around 33.8%. These projections indicate a temporary slowdown, but STMicroelectronics remains focused on executing its cost-saving measures and advancing its technological capabilities to navigate market fluctuations effectively.
The company is committed to sustainable practices and aims to become carbon neutral by 2027. STMicroelectronics is a global team of over 50,000 innovators, driving advancements in semiconductor technology through state-of-the-art manufacturing. As an integrated device manufacturer, we collaborate with more than 200,000 customers and thousands of partners to develop cutting-edge products, solutions, and ecosystems that address industry challenges and foster sustainability.
Our technologies power smarter mobility, enhance energy efficiency, and enable the large-scale adoption of cloud-connected autonomous systems. With a strong commitment to environmental responsibility, we are dedicated to achieving carbon neutrality for scope 1 and 2 emissions, along with partial scope 3 reductions, by 2027.
